Hedge Fund Awards 2015 www.acquisition-intl.com 32 Best Nordic Fixed Income Fund - Nordkinn Fixed Income Macro Fund Nordkinn Asset Management AB The Nordkinn Fixed Income Macro Fund aims to consistently generate stable absolute return over time and in all market environments by utilising a broad range of financial instruments to exploit desirable risks, neutralise undesirable risks and combining directional and non-di- rectional positions. Ludvig Uddeholt, Partner and Head of Investor relations at Nordkinn Asset Management, told us more about the fund Nordkinn Asset Management AB was founded in 2012 as an independent Nordic asset management firm by a selection of absolute return specialists with outstand- ing track records within investment, risk and client management. Specialised in fixed income macro with a particular edge on the Nordic markets, the firm’s PMs have backgrounds from blue- chip organisations such as NBIM, Central bank of Norway, First Securities and Ericsson Group. As a single hedge fund manager seeking to capitalise on the institutional backgrounds of the seven partners, Nordkinn builds its business with the investor viewpoint in mind. “We strive for maximising absolute returns in all market environments as measured by consistent risk adjusted performance,” says Ludvig Uddeholt, Head of Investor relations at Nordkinn Asset Management. “Our investment philosophy resides in identifying fundamental fair values of assets across the developed economies and exploit when market dislocations and significant deviations from long-term fundamentals occur. “We do that by deploying a fixed income macro strategy, where we seek to express combinations of directional and non-directional views across developed markets and with a clear edge on Nordic markets. The team follows a strict “game plan / tagging concept” inspired from behavioural finance. This concept brings discipline to our PMs in cutting losses in time and letting profits run. This results in a clear asymmetry in losses vs profits over time, which in combination act as the fundament in our am- bition to generate consistent absolute return. Our volatility target band corresponds to an annualised standard deviation of 4-8% over rolling 24 months.” The firm is a strong believer in absolute return as a concept, and, by extension, therefore hedge funds as an investment strategy – as it, if deployed correctly, can provide investors with clear diversification benefits in a portfolio context, says Ud- deholt. “Entering into 2015 and onwards, this notion may prove even more evident when looking at hedge funds within fixed income in particular. Given the extremely low interest rate levels across developed markets, we believe that the challenging prospects for traditional long-only investing in fixed income going forward provides opportunities for hedge funds like Nordkinn to truly prove its worth for investors.” A significant development within the hedge fund industry currently is the accelerat- ing trend for regulation, Uddeholt says. “A more regulated industry has its merits in securing confidence for the industry, yet is attached with risks for over-regulation, which needs to be properly addressed by both the authorities and the industry. We believe for instance that the European AIFM Directive provides the combined benefit of remaining within the strict regulatory framework in Sweden protecting investors, and an ability to market ourselves towards professional investors across Europe through so-called passporting.” Uddeholt says Nordkinn’s team are strong believers in prioritising investors’ interests. “Our investor viewpoint is expressed in features such as equal ownership across our partners (with no bonus payments and partners reinvesting dividends in the fund with lock-ups), which we believe ensures an incentive structure truly aligned with the investors’ interest. “Regarding transparency, we believe that it is in Nordkinn’s interest that our inves- tors truly understand what we do, thus we engage with our investors to ensure that they, from their perspective, receive full relevant transparency from us. Further, a team based investment process, integrated yet independent proactive risk man- agement, onshore structure with strict FSA supervision, strong fund governance, are all elements that support in securing investors’ confidence in Nordkinn. In aggregate this, we hope, emphasises the uniqueness of Nordkinn as a modern institutional hedge fund.” Nordkinn says the Nordkinn Fixed Income Macro Fund, which has been named Best Nordic Fixed Income Fund in the Hedge Fund Awards, has a “Nordic edge”. This, explains Uddeholt, refers to the team’s local focus. “We seek to maximise our Nordic edge in our investment strategy, where being present in Stockholm and Oslo and attached to the local market information flow provides us with a clear competitive advantage,” Uddeholt says. “The strong backgrounds of the members of our investment team having successfully managed large portfolios for some of the most prominent institutions in the Nordic region is in the core of our invest- ment skill-set. We are different from our global hedge fund peers in that we tend to approach the global markets from a Nordic perspective. “With the Nordic countries being open economies, our PMs have unique expe- riences and deep understanding of how the Nordic markets may relate to global markets. This does not only lead to Nordkinn having different exposures than those of our global peers (i.e. all equal higher allocation to Nordic markets) but also in Nordkinn having different underlying rationale/analysis behind our positions outside the Nordic region compared with our global peers.” Asked whether working in the Nordic region presents any specific challenges or opportunities that may not necessarily apply to firms in other parts of the world, Uddeholt says all fixed income hedge funds globally are faced with the same foray of challenges/opportunities in current market environment. “Specifically, however, Nordkinn sees ample opportunities in the wake of the ever decreasing level of proprietary trading from banks across Europe. In a Nordic context, less market participants are seeking to fill the gaps following market dislocations, which is something Nordkinn aspire to capitalise upon through the edge and skill-set of our investment team.” Over the coming year, Nordkinn will continue to focus on building its business further. “We’ll do this by means of remaining true to what we are and by focusing on consist- ent generation of risk-adjusted performance for our investors,” says Uddeholt. n Address: Nordkinn Asset Management, Kungsgatan 33, 6tr, 111 56 Stockholm, Sweden Tel: : +46 8 473 40 50 Email:
[email protected] Web: www.nordkinnam.com Fact File Best Nordic Fixed Income Fund - Nordkinn Fixed Income Macro Fund